City requesting more state assistance for minority-owned businesses

Ohio Development Services Agency considering request to place minority business assistance center in Canton

Matthew Rink CantonRep.com staff writer @mrinkREP

When the city looked for a construction firm to upgrade Nimisilla Park, Councilman Thomas West encouraged a local black business owner to bid on the job.

But there was one problem, an issue West says many other minority business owners face: The contractor wasn't able to secure a performance bond, a condition he needed to meet to be considered for the job.

"That's what holds a lot of us back," said Gary Barton, owner of B&G Masonry, Remodeling and Construction, who could not come up with the performance bond.

"That's what happens to a lot of minority businesses," West said. "They don't have that bonding and then they don't go for the contract. ...A lot of people might get turned away in the process because they don't have the skill set to do a business plan or fill out a contract."

Canton is asking the Ohio Development Services Agency for more state assistance for minority business owners in Stark County. Officials specifically want the state to locate a minority business assistance center in Canton. The agency is expected to make a decision in late November or early December.

It's the second time in four years the city has tried to land funding for a center, which provides both aspiring and existing minority business owners with accounting assistance, business management counseling, help identifying local resources and bond packaging.

Minority-owned businesses make up about 5.5 percent of all businesses in Stark County, according to the last available survey of business owners from the U.S. Census Bureau.

There are six minority business assistance centers in Ohio and an additional four branches. Canton would serve as a branch for the Akron center, which is the closest office to Stark County, West said. The state, if it approves the concept, would provide $55,000 for the center. The city would provide $15,000 for start-up costs, exceeding the 20 percent matching requirement, West said.

Jackie Williams, chief of the minority business development division of the Ohio Development Services Agency, said the contracts for all centers across Ohio expire at the end of the year, which allows the agency to review which areas are most in need of the resources.

DISADVANTAGE

A 2010 study by the U.S. Department of Commerce's Minority Business Development Agency found that there are major disparities in accessing capital between minority-owned businesses and non-minority businesses.

The study shows that minority-owned businesses are less likely to receive a loan than a non-minority business. When they do, they don't receive as much and pay higher interest rates than a non-minority owned business. This is true especially for small businesses with gross receipts of less than $500,000.

The average loan for a larger minority-owned business was $149,000, about half as much as non-minority businesses, the study found.

"It's clearly an issue," Williams said. "Sometimes it's a matter of clearing up your own financial statements, ensuring that everything is appropriate, that taxes are paid. There are a lot of businesses, because people are entrepreneurs, where there is not a line between their personal finances and business finances. It's a matter of counseling those business owners to take the necessary steps to clarify their financial picture."

JOINT VENTURE

Leonard and Brenda Stevens became business owners 17 years ago, buying and remodeling an old tuxedo shop at Sixth Street and Cleveland Avenue NW. Leonard, a former manager at Yellow Roadway Corp., and Brenda, who just began her career at Malone University, built what was then called Stevens Discount Carpet with savings they drew from their jobs. They've relied little on loans and grants available for small businesses.

Not having access to capital put them at a disadvantage, Brenda Stevens said. They've been unable to network with the people who may know about business opportunities or a sufficient staff to handle all of the day-to-day operations.

"Sometimes we don't know about those things until the very last minute or until it's too late," she said. "With an assistance center, we would be able to have a handle on those things while we go about the daily business or running our business. Sometimes it's difficult to run the business and be out in the community finding out these things."

The business, now called City Flooring and Design, relocated to 1131 Cleveland Ave. NW, about 11 years ago. The couple weathered the financial dips and drops of the housing crisis and subsequent recession, which brought home building to a standstill and kept cash-strapped homeowners from investing in things like new carpeting.

Leonard Stevens, who is also the president of the Stark County Minority Business Association, said the couple's flooring business has been able to score several commercial jobs, like the 40-unit Wilson Pointe Senior Apartments, which opened in 2009 at Fifth Street and McKinley Avenue NW, and at the Ralph Regula Federal Building, built in 2010. He'd like to do more beyond the Stark County area.

"If I could do a joint venture with somebody out of Akron or out of Cleveland – individually we might not be able to come up with the bonding for a $1 million contract or a $2 million contract, but collectively we could," he said.

One city woman is receiving help from a minority business assistance center, but she had to travel to Cleveland to get it, West said. Mary Claiborne plans to open a salon at the former Kentucky Fried Chicken building on Cherry Avenue NE in April. The center is helping her acquire a loan.

"She may be able to get a serious loan to be able to do it the way she wants to do it," West said. "That's what this partnership does. That's what a center like this could do."